With the new year, my wife and I have been talking about different vacations we would like to take in 2018. When I think about traveling, I am always reminded of a story I included in my article in this magazine a few months ago about the importance of assigning guardians for minor children. Because this is such an important aspect of estate planning and has a lasting impact on children who lose their parents, I have decided to include it again.
Life is unpredictable. No matter how prepared we are, unexpected events occur that leave us saying, “We didn’t plan for that.” The trick is identifying planning solutions to limit the effects of unexpected events. Only two out of ten households in the United States have a family estate plan. Where does this leave the remaining 80%? If you do not plan for your estate, then others (who may not care about your family, your property, or your wishes) will be making decisions for you.
Many parents wonder what will happen to their children if they pass away. The consequences of death can be extremely uncomfortable and the natural tendency is to avoid the topic altogether. However, avoidance does not produce solutions. One of the most important aspects of estate planning is appointing guardians for minor children. Most people do not realize that if guardians are not named and appointed in a legal document, the state has power to take custody of the children even where multiple family members are willing to care for them. In such cases, the children remain in state custody for six months to a year until a judge appoints a guardian.
About a year ago, a five-year-old girl attended a guardianship hearing. The judge was determining whether to appoint the girl’s aunt or neighbor as guardian. The girl’s mother, being business-oriented and financially savvy, had decided to go back to work when her daughter turned two. The parents had asked their neighbor to watch the girl during the day while they were both working. The couple found success and began traveling the world for business and pleasure. During those trips, the neighbor would watch the little girl for weeks at a time. On one business trip, the couple died in a car accident. The couple did not have an estate plan. They had not planned for that!
The state took custody of the girl for months while awaiting the guardianship hearing. The neighbor who had raised this girl for nearly three years was clearly the best choice for guardian. The aunt, although related, had never personally met her niece before seeking guardianship. The judge awarded guardianship to the aunt. Although judges try to do what is in the best interest of the children, they do not have the time nor resources to see the full picture before making judgments. Do not leave power with a judge to determine guardianship for your kids. The great news is, you can plan for that! Let me empower you with the knowledge necessary to plan and prepare for the unexpected.